IB Economics 3.1 Measuring Economic Activities Key Definitions

Fluctuations in the growth of real output, characterised by alternating phases of expansion (rising real output) and contraction (falling real output).

An income flow in an economy where the value of the output produced is equivalent the total income earned from its production, which is also equivalent to the expenditures spent on purchasing that output.

The level of prosperity, economic satisfaction, and standard of living experienced by members of an economy.

All resources or inputs used to produce goods and services.

The market value of all final goods and services produced in an economy over a period of time (usually a year), regardless of who owns the factors of production.

The total income earned by an economy's residents over a specific time period, equal to the market value of all final goods and services produced by the factors of production supplied by the economy's residents, regardless of the location of the factors of production.

An alternative to traditional national income statistics that measures economic well-being using numerous quality of life dimensions in addition to real GDP per capita.

An alternative to traditional national income statistics that accounts for environmental sustainability and inequalities as a measure of economic well-being.

Part of the economy that lies outside the formal economy, and involves economic activities that are unregistered and legally unregulated.

The addition of funds into the income flow through investment, government spending, or exports.

The formal and informal rules, laws, and systems that structure economic, political, and social interactions, influencing decision-making, resource allocation, and economic development.

The removal of funds from the income flow, represented by savings, taxes, or imports.

The total income of an economy, composed of the sum of wages, interest, rent and profit.

The measurement of an economy's national income and output, as well as other measures of economic activity.

The total value of the final goods and services produced by an economy, often measured by real GDP. It is also known as aggregate output.

An alternative to traditional national income statistics that evaluates economic well-being across multiple dimensions, incorporating aspects that account for the quality of life.

The ability of a given amount of money to buy goods and services, which depends on the prices of those goods and services. A fixed amount of money with higher purchasing power can buy more goods and services than the same amount with lower purchasing power.

Special exchange rates designed that equal the purchasing power of different currencies to that of 1 US dollar.

Sustained falling real output in an economy (a contraction in the business cycle) lasting two consecutive quarters (6 months).

Preserving the capacity of the environment and the economy to continue to produce and satisfy the needs and wants of future generations.